Opportunities for retail IT departments in 2017

IT2017.png

In the corporate world of now-a-days, there are rarely any processes that do not depend heavily on IT technology. Ranging from purchase systems, CRMs, ERPs and all other decision and relation supporting systems through in store equipment like POSes, up to corporate core functions like data, communications and reporting.

The range of IT responsibilities in a corporation is vast and while IT departments tend to be rather large and crowdy and the annual IT budget growing year-by-year, most of line of business managers say that their corporate IT is a show stopper. None-the-less there are many opportunities to improve that impression.

Driving innovation

With the increasing push from corporate boards and shareholders for innovation, many companies think of and discuss different ways how innovation can be achieved and accelerated. Innovation is a very modern buzz word of now-a-days. But far from a simple hype, many of the world biggest companies invest heavily their resources to stay ahead of their competitors. Driving innovation is a demanding process with many risks and pitfalls.

There are three basic steps that help you to ignite innovation: allocating needed resources, creating and maintaining a spirit driving new ideas and allowing new concepts or ideas that are not “conform” to your company’s current strategy.

IT departments can play a vital role here as many Innovations are aided in their core by IT technology. Especially for retail IT, there are many new windows of opportunities open here … In-store analytics is a new and promising way to explore one’s customer journey in the brick-and-mortar stores.

Clearly articulate the value of tech innovation

This is a vital point for all innovation activities. There are many excellent ideas out in the world with little to none practical use. Even things that worked for one company might not work for another. During the innovation process sooner or later every idea will be presented in front of the board to ask for funding and approval.

It is hard for many IT executives to clearly articulate the value of tech innovation, or even to explain the core idea. Speaking IT jargon and technical language in front of the board is never a good idea as it simply will not be understood. Business executives need to hear their language – costs and profits, risks and opportunities, legal and compliant views as well as impact on customers and competitors.

Making business

Many things sold now-a-days are offering IT related services. Who is better suited then IT to suggest and prepare IT gadgets? Head up displays in cars and even autonomous driving would be impossible without strong IT and business partnership. While connected cars are already reality, automotive data brokering might bring in the near future more revenue than selling cars.

Kiosks enabling customers to design and order customized meals directly in restaurants are new channels to generate revenue and Blockchain might be even the new business for banking.

Using strength of a brick-and-mortar store

Even legacy assets and systems can be a source of competitive advantage, especially when facing new digital and disruptive competition. Brick-and-mortar bound discounts are impossible to duplicate for on-line retailers and generate new traffic to one’s stores.

Agility

In the fast paces business world of today … it is no longer possible for IT departments to work in the old, reliable but slow way they did for the last 20 years. Working on system specifications for 2 months, doing the programming for 6 months, testing with users for another month and resigning the system to what the customer really wants for another 3 months makes up a year. Within this year, business has no solution and probably loses even the need for the system.

IT departments should strive to give the business a minimum viable product within weeks of communicating the need, adding functionality and stability with each iteration on a monthly basis and securing compliance and necessary paperwork at the end.

Even in the IT daily business there is a need for increased agility. As today’s businesses are more and more dependable on a round-the-clock working IT environment, response to major IT outages must be swift and well ahead of agreed service level agreements (SLA).

Educate the board

Many boards see technology as an IT issue. Understanding how to integrate technology innovation into the corporate business model is often left to lower levels of corporate hierarchy, leaving many possible gains and chances out of board’s radar. It is vital for IT execs to continuously educate the board so corporate leaders might become tech-savvy to see the potential of technologies for their business areas and the corporation as a whole.

Attracting top talents

The matter is of high importance to HR and even the whole board as attracting top talents gets harder with each generation. Gen X, Y, Z … each target group of potential employees has its own desires, specifics and quirks. In the modern world of social networking and shared feelings and experiences, employees have it easy to find job offers, salary comparisons and (ex)employee feedback on your vacant positions.

IT departments have always struggled to find and attract top talents. Best of the best were often taken by IT giants, dot.coms and Silicon Valley start-ups and facing the truth … often are corporate IT departments seen only as a costly bunch of weird nerds from the basement … tending to computers and printers. Seldom are they seen as an asset to company growth and even survival.

A common mistake in the corporate world and IT especially is the habit to try to find the fitting people for defined functions … all ignoring the fact that top talents are unique and seldom fit in corporate hierarchy layers and predefined roles of responsibilities. Even the more, growth and evolution of one’s top talents is limited and hindered by corporate HR guidelines, eventually leading to talents leaving the company. IT execs should strive to take a role of HR business partner, assuming responsibility and proactively attract and retain their key talents.

Advertisements

What is an innovation?

What is an innovation?

Innovation is one of the most used buzzwords now-a-days. It’s the headline on many conferences, courses and seminars. Articles in the world’s most respected magazines cover stories about incredible and never-seen-before innovations on a regular basis.

The term „Innovation“ is used to label a major breakthrough like NFC/mobile payments as well as system evolution like desktop virtualization. There are several definitions of an innovation like „Innovation is a new idea, more effective device or process by Wikipedia, „A new method, idea, product, etc.“ by Oxford Dictionaries or „process of implementing new ideas to create value for an organization by Yale Information Technology Services.

Businessdictionary.com describes innovation as „process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products.

Innovation can come in a slow and evolutionary way, incrementally adding value to a product or service (for example fingerprint authentication in iPhones) or in a revolutionary way, introducing a breakthrough and disrupting certain area of business (for example mobile phones vs. wired telephones or tablets vs. traditional desktops/notebooks)

Key attributes of any innovation are: 1. creation of new market or significant competitive advantage on an existing market, 2. employment of new technologies or usage of existing technologies in a yet unseen way and 3. economical profitability when sold to end-users.

What do you understand under the term of innovation?


Business case or a payment solution – what are you offering?

business_case_vs_payment_solutionI’d like to pose a question to the attendees of  mPOS World 2015 event. When speaking to your customers, do you offer an innovative and effective mPOS solution … or a well-crafted business case outlining what gains and for what costs will the customer receive?

While both ways are valid approaches towards a customer, I can only recommend considering the business case approach. In all my years as IT executive, I was approached many times by vendors offering excellent solutions. To stay focused on the mPOS event, let’s narrow down to payment solutions like new digital wallet solution, mPOS tablet device or an NFC based non-brand credit card. Each of the offered solution is innovative even disrupting and offers new ways of attracting tech oriented customers to our stores and generating new revenue.

Each of solution has a price, but that is expected and after a few rounds of negotiations acceptable. But there is an another side to any new payment solution deal … and that is all the hassle on the customers side connected with the implementation. Energy, time, resources and costs that need to be considered, approved by respective owner, spend in accordance with the project plan, tracked for reporting and controlling issues and successfully completed in the POTIFOB (project on time in full on budget) way.

Considering just a simple NFC payment solution, there are a number of questions and points to be answered and solved to make the project a success.

1. Numbers … How many NFC capable devices are in my market(s)? How many NFC capable credit/debit card holders are in my area(s)? Do I sell goods that can be sold via NFC payments (e.g. price under 20 EUR?) What are incentives for customers using NFC?

2. Costs … costs for the NFC solution are just a small part here as we need to include: eventual purchase of new POS terminals including roll out costs, adjustments to POS software, adjustments to in-house payments processing software, testing and certifying the whole HW/SW solution by given authority (acquiring bank, VISA/MC, any government offices), solution testing in-house or externally, training of your IT staff, training of your sell guys, marketing costs (advertisement, printed posters and stickers in your stores, promotions)

3. Funding … do we need to pay for all costs alone? Who else might be benefiting from this project? Is that one willing to share some of the costs? Is our acquiring bank interested in this project? What about VISA/MC/AMEX/DISCOVERER?

4. Perks … what can be used to promote the business case in eyes of one’s superiors? Do we have numbers based projection of revenue increase vs. necessary costs? Can this project be used as a part of a larger marketing or IT initiative? Can we use some numbers based business case from previous successful implementations?

It is well known in IT departments of large retail chains … there is a lot beyond the decision of adopting a new payment method, but that might not be so obvious for solutions providers. Look around during the mPOS World 2015 event, discuss with your peers and see for yourself, what are the companies offering, business cases of sole payment solutions?


Six technology innovations in retail coming our way.

Six technology innovations

Let me share six technology innovations in retail coming our way that might change the way customers do their shopping.

 

Zulily Applies T.J. Maxx Model to E-Commerce by Ashley Lutz and Hayley Peterson @ dailyfinance.com

Similar to discount retailer T.J. Maxx, Zulily (ZU), founded in Seattle in 2010, creates a daily treasure hunt for the mothers who shop its site. While T.J. Maxx offers close-out discounts on various brands in its stores, Zulily’s website offers flash sales on apparel, home goods, toys, and more. The deals and constantly changing selection keep shoppers coming back, and the e-commerce site, which went public in 2013, has nearly 4 million users.

 

Carrefour trial indoor positioning using lighting by retail-innovation.com

Carrefour are trialling a connected lighting system with LED-based indoor positioning in a store in Lille, France. The lighting replaces its previous fluorescent lighting with 2.5 kilometres of energy efficient Philips LED lighting that uses light to transmit a location signal to a shopper’s smartphone, triggering an app to provide location-based services such as navigation and location aware offers.

 

Starbucks Revolutionizes Mobile Payments and Delivery by Ashley Lutz and Hayley Peterson @ dailyfinance.com

Starbucks (SBUX) is responsible for making coffee shops ubiquitous. Now the Seattle icon is leading the charge on mobile payments at its 21,000 locations. The company’s mobile app allowed customers to pay for their coffee beverages by smartphone before Apple Pay. An impressive 16 percent of transactions are now mobile. The company is also testing delivery in Seattle and New York.

 

Lowe’s Pushes Innovations To A New High by Avi Dan @ Forbes.com

Last year Lowe’s made fabric swatches and paint samples obsolete when it came to decorating. The home improvement store has built, what it dubs, a “holoroom.” It uses 3-D technology and augmented reality to allow customers to “walk” through a floor plan of their dream home. In the 20-foot by 20-foot specially designed room, customers can move anything from furniture to toilets and swap out floors and paint colors with the swipe of a finger on an iPad.

 

EDITD Shows Real-Time Purchases by Ashley Lutz and Hayley Peterson @ dailyfinance.com

EDITD is a technology company that helps retailers like Target (TGT), Gap (GPS) and Asos have “the right products, at the right place, at the right time.” The English company tracks what people are buying in real time. This helps retailers make better merchandising decisions and restock items faster.

 

Voice operated shopping Apps by Zoe Wood @ The Guardian

“Tesco, I want the same shopping as last week and I want it delivered on Thursday at 9pm.” If only buying your groceries online was as easy as barking an order at your phone. Mark Loosemore, commercial director of “voice assistant” technology firm Capito Systems, thinks it soon will be. “This is very, very new but we think this technology has quite broad applications,” he says. “We find that young people are much quicker to have a go than perhaps people who grew up with a desktop.”


IT structure: Local agility vs. global efficiency

local agilityRecently I was asked to join a discussion regarding organisational structure of IT departments in large corporations and to compare pros and cons of a centralized and decentralized structure of IT departments. Discussed were IT departments consisting of a large team based in the HQ and smaller teams based in different countries where the corporation was present.

Centralised structure – with a strong IT core team based in HQ. It is the HQ where general rules are created: IT strategy, infrastructure standards, operational guidelines, IT procurement and program / project portfolios. Local IT teams are meant to run local IT operations and to execute rules / projects coming from HQ.

Decentralised structure – IT core team based in HQ is responsible for key strategies and procedures, where local IT teams are responsible to create local strategies and IT operations standards. Program / project portfolios and IT procurement are decided locally or with cooperation with HQ.

During the discussion, several key pros and cons of both approaches were discussed:

Centralised structure

Pros: identical IT standards and procedures among all local IT teams, Program / project portfolios compliant with corporate strategy, homogenous IT infrastructure, cost savings based on centralised IT procurement.

Cons: slow adaptation to change due to beaurocracy, local needs might be dismissed by HQ, local legal requirements are handled not flexible enough, innovation coming from local teams is given lesser priority, one-fit-all solutions might not be suitable for some local orgs.

Decentralised structure

Pros: faster reactions to local needs, ability to offer tailored solutions to every local org, proximity to customer makes it possible to address business needs,

Cons: heterogeneous IT infrastructure among local orgs, scattered focus among many projects / initiatives through local orgs, disability to roll out standards across all local orgs, increased IT costs due to local IT procurement.

Another possibility was discussed later on, a hybrid structure, taking best of both worlds … local agility AND global efficiency. The key was to find the right mixture of competencies for all involved IT teams, HQ and local ones. Based on the type and maturity of discussed company, industry sector and actual size, ways to achieve both benefits did vary. A hybrid structure would be able to use the benefits of a central strategy and infrastructure, cost savings for IT procurement and still enjoy the agility of engaged local teams addressing needs of local business.


Five Retail Innovations coming our way.

Five Retail innovations coming our wayLet me share five retail innovations coming our way that might change the way customers do their shopping.


Navigating the Supermarket in Super Style by Lou Carlozo @ foxbusiness.com

The smartphone has all but replaced the standalone GPS as a product in the average consumer’s tech arsenal. That’s because mapping apps from Google, Apple, and Waze help us get from point A to B. Ah, but they don’t do it indoors. Molloy sees a time in the not-too-distant future when app developers figure out how to map your favorite grocery store or retail store, so that you can just enter your grocery list, for example, and the app does the rest. “You can imagine a GPS that would take you on the most efficient course, where the store knows the things you buy and leads you there,” he says.

In Denmark, supermarket crowdsources suggestions for local products by Chris Kreinczes @ forbes.com

As concerns grow over food air miles, and more consumers want to buy local, SuperBrugsen in Denmark has come up with a novel way of ensuring that the produce they stock will appeal to eco-minded consumers. Through their website, customers can suggest particular local items they would like the store to stock, after which managers will taste-test the items to ensure their quality. A clever way to use customer crowdsourcing to ensure that the store only stocks items that will sell. The crowds have also been put to good effect in the Netherlands through the Avoid The Shopping Crowds app that analyzes social media feeds to tell the user how busy a shop is before they enter it. Both businesses use crowdsourced data to improve real life experience.

Try on augmented reality Lacoste shoes in store by retail-innovation.com

Lacoste have launched a mobile app which helps make styling your outfit with a pair of shoes a little quicker and a little more fun. Customers simply scan trigger images in-store to quickly try on a selected shoe and interact with additional content. Customers can also take photos and share them with friends on Facebook, Twitter and email. The application which uses product photos captured in 3D will be used in Lacoste’s stores, as well as concessions in department stores.

‘Colourmatic’ Window Display Advises on How to Enliven Your Outfit by creativity-online.com

New Zealand fashion retailer AS Colour, along with agency FCB Auckland, has launched a new technology designed to help consumers add spice to their wardrobes, while drawing them into its stores. The brand has launched Colourmatic, a “virtual stylist” digital display that can examine shoppers’ outfits.

Consumers stand before the display at the brand’s AS Colour Britomart store in New Zealand. It will rate their outfits on a scale of 1-100 and will determine originality and freshness, point out “weak link” pieces, whether or not everything harmonizes, and give them advice on what colors and pieces they should be mixing into their wardrobes. The recommendations, of course, are available steps away, through the doors of the AS Colour store.

“When it comes to making style decisions, many shoppers struggle to know exactly what they are looking for,” said AS Colour Art Director Stephen Richardson in a statement. “The Colourmatic acts as your own personal fashion critic, identifying where you need help and providing solutions.”

According to the agency, sales are up 16% since the launch of the campaign, and people who used the Colourmatic have improved their outfits by an average of 28%.

Amazon’s two-day-delivery program by J.J. MCCORVEY @ fastcompany.com

Last year, Amazon CEO Jeff Bezos told Fast Company, “The balance of power continues to shift toward consumers and away from companies.” One exception: Amazon itself, which amasses more power daily. Membership of its two-day-delivery program, Amazon Prime, grew by millions in 2013; its grocery-delivery service expanded to Los Angeles and San Francisco, hooking customers into regular delivery habits; and its Kindle Fire HDX, with an instant tech support feature, became an attractive alternative to the iPad. Competitors such as eBay try to compete, but Amazon’s Sunday-delivery partnership with the U.S. Postal Service—and its lofty promise of 30-minute drone delivery by 2015—put it far, far ahead. Yet Bezos still believes that it’s day one for the e-commerce giant. “There’s still so much you can do with technology to improve the customer experience,” he told Fast Company in September. “That’s the sense in which I believe it’s still day one, and that it’s early in the day. If anything, the rate of change is accelerating.” But with the combination of Amazon Prime, AmazonFresh, and the widespread fulfillment centers, it looks like Amazon is still going to be near impossible to catch.

As a comment, let me say that all text was used copy & paste from its original published place.


Keeping the lights on is essential IT duty.

Keeping lights on CopyInnovation, targeting pockets of opportunity and keeping the lights on are the three pillars of every successful IT department. While the first two pillars are often discussed in length, keeping the lights on is seen as something with little added value, often reduced to a pure commodity … like electricity or tap water. While I fully understand and agree with the importance of Innovation and targeting pockets of opportunity, one shall never underestimate the importance of core IT functions and services … something we refer to as keeping the lights on.

In many now-a-day companies, most support and business processes rely heavily on IT systems and environment. Procurement department cannot place orders for needed items and goods without a connection to the internet or intranet of their suppliers, manufacturing units can hardly work if their CNC (robotic) machinery is not programmed or when their ERP systems are off-line, billing departments do not issue invoices written by hand, but rather from a SAP-like system, salaries of your sales representatives are calculated based on their performance that is stored in the company’s data warehouse, brick and mortar shops can hardly sell without their POS systems, on-line shopping is worthless without a well maintained web site.

All companies are affected by the state of their IT systems, some more, some less. Online businesses are kept alive with IT systems, manufacturing industry is dependent on their automated machinery, automotive industry can hardly work without just-in-time supplier chain, financial sector is basically build on data stored on their hard drives.

Just to make the picture more plastic, just imagine your own day without your Smartphone. How long can you ‘survive’ without your mails? Another example, when arriving in your office, you learn that the corporate network is down … how will you check your daily reports? Can you access your files stored on a network drive? Can you work on your projects when your time schedules and to-do’s are stored in your project management tool (that is now offline). Making the story short, WHAT can you do without your IT environment working?

Keeping the lights on is a summary of day-to-day work of your ‘common’ IT staff that makes sure that basic processes of your company can run. As soon as this work is neglected (for whatever reason) the company will soon face serious effect, from lower revenue from your distribution channels, through being not able to fulfil customer’s orders … up to not being able to pay your own employees.

Can you believe that some think that ‘Keeping the lights on’ has no added value for a company?